- The greenback has rallied slightly against the Singapore dollar during the trading session on Friday, as we continue to hang around the 50-Day EMA.
- Perhaps more importantly, we are hanging around the 1.35 level, an area that would have a certain amount of psychology attached to it.
- Because of this, I think the market just looks as if it is trying to sort out where once go next, and the nonsense during the US session on Friday will only throw more confusion into the mix.
Technical Analysis
The US dollar currently sits right around the 50-Day EMA, but I think the real challenge is going to be whether or not we can break above the 1.3566 level. If we can do that, then the market is likely to go looking toward the 1.3650 level, an area that was a small double top. Short-term pullbacks at this point in time will continue to look at the 200-Day EMA underneath as support, near the 1.3480 level.
The market has been decidedly sideways for a while, so the nonsensical noise during the trading session on Friday probably didn’t do too much in the way of technical damage, because it really wasn’t seen in this pair. However, if we are starting to see the US economy slip a bit, it’s hard to tell what will happen next, because both of these are actually considered to be safety currencies, although of course the US dollar is considered to be the biggest one of all.
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Position sizing is crucial, but unlike many other pairs, the Singapore dollar tends to be one that moves fairly slowly, so I am generally a little bit more comfortable with bigger size. That being said, if we get some type of nasty move on Monday, you need to be cognizant of how it could affect everything, even pairs like this one that you wouldn’t think having sensitivity to other assets. Keep in mind that this is a pair that you have to be very patient with, and therefore you’re not expecting big moves most of the time.
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